In the blog below, you’ll note how the Information Commissioner’s Office is taking a hard-line approach to PECR. If an organisation uses electronic channels to re-permission its database in time for GDPR enforcement in May 2018, it must comply with PECR. Moneysupermarket.com is the latest in a series of big names to fall foul of email regulations.

You’ll also see an analysis of ransomware profitability, which helps explain its continued growth; the final story summarises Facebook’s views on data security.

The ICO issues fines amounting to £160,000 for Provident Personal Credit and Moneysupermarket.com

The Information Commissioner’s Office has issued civil monetary penalties of £80,000 each for Provident Personal Credit, a Bradford-based sub-prime lender, and Moneysupermarket.com, a leading brand comparison site, on the 17th and 20th of July respectively. In both cases the fine was for breaching the Privacy and Electronic Communications Regulation (PECR).

Unsolicited texts annoy prospects and customers

Quick-loan credit firm Provident Personal Credit, a brand operated by Provident Financial, was fined £80,000 for sending out nearly 1 million nuisance text messages in the space of 6 months.

The company employed a third party affiliate to send the unsolicited marketing for loans provided by a sister brand, Satsuma Loans.

Text messages may not be sent if the recipients have not consented to receiving marketing texts, so this activity was in breach of PECR.

Beware of sending “service” emails which are actually “marketing” emails

A few days later, the price and brand comparison website Moneysupermarket.com was fined for sending 7.1 million emails over 10 days updating customers with its Terms and Conditions, despite these customers having explicitly opted-out of receiving this type of email. This offence is almost identical to the breaches for which Morrison’s, Honda and Flybe were fined last month.

One of the key problems was the section “Preference Centre Update” which said: “We hold an e-mail address for you which means we could be sending you personalised news, products and promotions. You’ve told us in the past you prefer not to receive these. If you’d like to reconsider, simply click the following link to start receiving our e-mails.”

In a previous blog, we explained the ambiguity between ‘service’ emails and ‘marketing’ emails when implicitly emailing or communicating marketing content to individuals who have opted out. This is in breach of regulations (which will only get stricter after the General Data Protection Legislation comes into force in May 2018).

Google research leads to fears of proliferating ransomware

Ransomware encrypts and scrambles victims’ computerised files. The files will not be decrypted until after a ransom is paid

Research carried out by Elie Bursztein, Kylie McRoberts and Luca Invernizzi from Google has found that cyber-thieves have made $25m (£19m) in the last two years through the use of ransomware. The research suggests that this type of malware regularly makes more than $1m (£761,500) for its creators.

The two strains of ransomware that have seen the most success are ‘Locky’ and ‘Cerber,’ which have collected $7.8m (£5.9m) and $6.9m (£5.2) respectively. But fears have arisen that due to the profitability of ransomware, new and more expansive variants will emerge amid the increasingly competitive, aggressive and “fast-moving” market for cybercrime weaponry. Mr Burszstein warns that ‘SamSam’ and ‘Spora’ are variants that seem to be gaining traction.

The research collected reports from victims of ransomware but also from an experiment wherein thousands of ‘synthetic’ virtual victims were created online. Mr Bursztein and his colleagues then monitored the network traffic generated by these fake victims to study the movement of money. More than 95% of Bitcoin payments (the preferred currency for ransom payments) were cashed out via Russia’s BTC-e exchange.

The lucrative nature of ransomware has led the Google researchers to conclude that it is “here to stay” and may well proliferate among the many syndicates and crime networks around the world. At a talk at the Black Hat conference, one of the world’s largest information security events, Mr Bursztein warned, “it’s no longer a game reserved for tech-savvy criminals, it’s for almost anyone.”

Facebook’s security boss argues that the industry should change its approach

Hitting the data security balance: user issues vs. tech solutions

At a talk at this year’s Black Hat, Facebook’s Chief Information Security Officer, Alex Stamos, has criticised the information security industry’s over-prioritisation of technology over people.

Advocating a ‘people-centric’ approach to information security, Mr Stamos stated his belief that most security professionals were too focused on complex ‘stunt’ hacks involving large corporations and state organisations, and tended to ignore problems that the majority of technology users face.

He told the attendees, “we have perfected the art of finding problems without fixing real-world issues. We focus too much on complexity, not harm.”

He explained that most Facebook users are not being targeted by spies or nation states, and that their loss of control over their information are from simple causes with simple solutions in which, he claims, the security industry takes no interest. He criticised the industry in general for lacking ‘empathy’ with less tech-savvy people, citing the often-expressed thought by security professionals that there would be fewer breaches and data losses if people were perfect.

He used the example of the widespread criticism from cyber experts that the security team for Facebook subsidiary Whatsapp faced after their decision to use ‘end-to-end’ encryption for the popular messaging app, which was heralded by some as sacrificing security for the sake of usability. Such a sacrifice did not manifest, but Mr Stamos was keen to emphasise the fact that it simply did not occur to security experts that usability was worth pursuing.

Mr Stamos advocated the diversification of the industry by working with less technically minded people who could empathise with the imperfections of tech-users, thus helping to develop more straightforward tools and services that would benefit a larger amount of people.

Facebook has also committed half a million dollars to fund a new project to secure election campaigns from cyber attack. The initiative will be run by the Belfer Center for Science and International Affairs, a think-tank affiliated to Harvard University. This is timely, given the scandals around the cyber- attack on French President Emmanuel Macron’s recent election campaign, and the Russian hack of the Democratic National Committee during the US elections last year.

If you have any data privacy compliance, governance or security concerns which you’d like to discuss with Data Compliant, please email dc@datacompliant.co.uk.

Information Commissioner’s Annual Report

The Information Commissioner’s Office (ICO) published its annual report on the 13th July. It is the first time the Information Commissioner Elizabeth Denham has compiled an annual report, having taken up the post a year ago.

The report highlights the increased powers and expanding caseload and capacities of the regulator. At a time of increasing concern about the use (and abuse) of personal information, the ICO is seeing a great deal more work. This is, in part, reflected by an increase in staff numbers of around 8% year on year.

GDPR and Public Trust

The ICO’s foreword emphasises its commitment to regaining public trust in data controllers and processors. It is hoped that changing laws provide the regulator with an opportunity to enable individuals to trust in large organisations handling personal information. The Commissioner states that “trust” will be “at the heart of what the Information Commissioner’s Office will do in the next four years.” Confidence in the digital economy is a consideration that the regulator acknowledges and aims to encourage, especially since the digital sector is growing 30% faster than any other part of the economy.

This echoes the government’s concerns regarding the digital economy and its relation to data protection principles that were enumerated in the Queen’s Speech and addressed by several measures including a Data Protection Bill, which is designed to implement the General Data Protection Regulation (GDPR).

In a year characterised by the impending replacement of the Data Protection Act 1998 (DPA) with the GDPR in May 2018, the report’s outline of major work undertaken leads with a nod to the many public, private and third sector organisations that will be preparing for the new legislative framework.

Consent

‘Consent,’ which has become one of the watchwords for the GDPR (and a word that will be increasingly found on the bulletin boards and coffee mugs of marketing departments) will take on a stricter legal definition soon – a marketing monolith for which the ICO anticipates organisations will seek detailed guidance.

Data Breaches

But the GDPR by no means eclipsed the ICO’s other responsibilities. Nuisance calls, unsolicited marketing and data sharing have routinely seen organisations facing fines and other civil measures. Breaches of the DPA and Privacy and Electronic Communications Regulations 2003 (PECR) such as these by a number of charities, of which the Daily Mail reported allegations in 2015, have led the ICO to issue 13 civil monetary penalties to the value of £181,000.

Indeed, some companies, Honda (whom we reported about last month) being an explicit example, have been issued fines for unsolicited marketing in breach of the DPA due to emails which asked for clarification regarding customers’ marketing preferences – which Honda for example maintained were a means of preparing for the GDPR. So while preparation for the GDPR is something to which the ICO has committed a great deal of resources, they have by no means neglected upholding the current law. The ICO has consistently made clear that it is not acceptable to break the law in preparation for another.

Monetary penalties

Overall, the ICO issued more civil monetary penalties for breaches of PECR than ever before (23), to the value of £1,923,000. It has also issued 16 fines for serious breaches of data protection principles totalling £1,624,500. It cannot be stated enough that after May 2018, these figures could skyrocket if organisations do not find ways of being compliant with the new, more expansive and rigorous legislation. Criminal prosecutions have seen a 267% increase, and the ICO has received 18,300 concerns regarding data protection brought to them – 2,000 more than last year.

Subject Access Requests (SARs)

Data controllers or organisations handling a wide range of personal data may have increasing requests for Subject Access Requests (SARs). The report states that 42% of all concerns brought to the ICO where the nature was specified were related to subject access. While these requests for data are provided under the DPA (and will be upheld with more rigour as one the data subject ‘rights’ by the GDPR) and not the freedom of information legislation, it nonetheless falls upon organisations of whatever size to be co-operative and compliant when the disclosure of information is required. It is important for organisations to train their staff to be able to recognise a SAR and act promptly. Data controllers must recognise the importance of compliance not only with the law but with ICO audits and investigations, as well as of the necessity for efficient and conscientious data handling.

For information about how DC can help you meet the requirements of GDPR, please email dc@datacompliant.co.uk.

When are they needed? How are they done?

Next year under the new GDPR data protection legislation, Privacy Impact Assessments will become known as Data Privacy Impact Assessments, and will be mandatory instead of merely recommended.

The ICO currently describes PIAs as “a tool which can help organisations identify the most effective way to comply with their data protection obligations and meet individuals’ expectations of privacy.”

While the soon-to-be-rechristened DPIAs will be legally required, data controllers should continue to fully embrace these opportunities to ensure that heavy fines, brand reputational damage and the associated risks of data breaches can be averted from an early stage in any planned operation.

When will a DPIA be legally required?

Organisations will be required to carry out a DPIA when data processing is “likely to result in a high risk to the rights and freedoms of individuals.” This can be during an existing or before a planned project involving data processing that comes with a risk to the rights of individuals as provided by the Data Protection Act. They can also range in scope, depending on the organisation and the scale of its project.

DPIAs will therefore be required when an organisation is planning an operation that could affect anyone’s right to privacy: broadly speaking, anyone’s right ‘to be left alone.’ DPIAs are primarily designed to allow organisations to avoid breaching an individual’s freedom to “control, edit, manage or delete information about themselves and to decide how and to what extent such information is communicated to others.” If there is a risk of any such breach, a DPIA must be followed through.

Listed below are examples of projects, varying in scale, in which the current PIA is advised – and it is safe to assume all of these examples will necessitate a DPIA after the GDPR comes into force:

A new IT system for storing and accessing personal data.

A new use of technology such as an app.

A data sharing initiative where two or more organisations (even if they are part of the same group company) seek to pool or link sets of personal data.

A proposal to identify people in a particular group or demographic and initiate a course of action.

Processing quantities of sensitive personal data

Using existing data for a new and unexpected or more intrusive purpose.

A new surveillance system (especially one which monitors members of the public) or the application of new technology to an existing system (for example adding Automatic number plate recognition capabilities to existing CCTV).

A new database which consolidates information held by separate parts of an organisation.

Legislation, policy or strategies which will impact on privacy through the collection of use of information, or through surveillance or other monitoring

How is a DPIA carried out?

There are 7 main steps that comprise a DPIA:

Identify the need for a DPIA

This will mainly involve answering ‘screening questions,’ at an early stage in a project’s development, to identify the potential impacts on individuals’ privacy. The project management should begin to think about how they can address these issues, while consulting with stakeholders.

Describe the information flows

Explain how information will be obtained, used and retained. This part of the process can identify the potential for – and help to avoid – ‘function creep’: when data ends up being processed or used unintentionally, or unforeseeably.

Identify the privacy and related risks

Compile a record of the risks to individuals in terms of possibly intrusions of data privacy as well as corporate risks or risks to the organisation in terms of regulatory action, reputational damage and loss of public trust. This involves a compliance check with the Data Protection Act and the GDPR.

Identify and evaluate the privacy solutions

With the record of risks ready, devise a number of solutions to eliminate or minimise these risks, and evaluate the costs and benefits of each approach. Consider the overall impact of each privacy solution.

Sign off and record the DPIA outcomes

Obtain appropriate sign-offs and acknowledgements throughout the organisation. A report based on the findings and conclusions of the prior steps of the DPIA should be published and accessible for consultation throughout the project.

Integrate the outcomes into the project plan

Ensure that the DPIA is implemented into the overall project plan. The DPIA should be utilised as an integral component throughout the development and execution of the project.

Consult with internal and external stakeholders as needed throughout the process

This is not a ‘step’ as such, but an ongoing commitment to stakeholders to be transparent about the process of carrying out the DPIA, and being open to consultation and the expertise and knowledge of the organisation’s various stakeholders – from colleagues to customers. The ICO explains, “data protection risks are more likely to remain unmitigated on projects which have not involved discussions with the people building a system or carrying out procedures.”

DPIAs – what are the benefits?

There are benefits to DPIAs for organisations who conduct them. Certainly there are cost benefits to be gained from knowing the risks before starting work:

cost benefits from adopting a Privacy by Design approach: knowing the risks before starting work allows issues to be fixed early, resulting in reduced development costs and delays to the schedule

risk mitigation in relation to fines and loss of sales caused by lack of customer and/or shareholder confidence

reputational benefits and trust building from being seen to consider and embed privacy issues into a programme’s design from the outset

For more information about DPIAs and how Data Compliant can help, please email dc@datacompliant.co.uk.

So it’s getting closer and closer to Christmas – a time for giving, with more and more charity adverts on the TV, on the radio, on social media – in fact pretty much everywhere you look. Although Christmas can be a bit tight on the purse strings thousands of people still give to their favourite charities.

Whether you’re helping children, refugees, animals or cancer or medical research, these organisations all promote that the money goes to a good cause. Unless this ‘good cause’ is to pay an ICO fine…?

Two of the major charities we all know and love are the RSPCA and the British Heart Foundation. And both have been under investigation for secretly screening its donors aiming to target those with more money. This process is known as “wealth-screening”.

The two organisations hired wealth management companies who pieced together information on its donors from publicly available sources to build data on their income, property value and even friendship circles. This allowed for a massive pool of donor data to be created and sold.

The RSPCA and BHF were part of a scheme called Reciprocate where they could share and swap data with other charities to find prospective donors. Donors to both charities were given an opt-out option.

Information included in the scheme was people’s names, addresses, date of birth and the value and date of their last donation. The ICO ruled that the charities didn’t provide a clear enough explanation to allow consumers to make an educated decision what it was they were signing up for, and therefore ruled that they had therefore not given their consent.

The RSPCA has admitted that it was not aware of the actual charities with whom they were sharing their data. It also became clear that the charity shared data of those donors who had opted out.

The BHF insists it had all the correct permissions. However the ICO disagrees on the basis that the charities with whom they were sharing the data were not for similar causes.

The ICO has fined the RSPCA £25,000 and the British Heart Foundation £18,000. Ironically the BJF was praised on its data handling by the ICO in June this year, and it is likely to appeal the fine.

In my opinion I feel the whole thing is a mess. I like to give to charity when I can, which if I’m honest, isn’t as frequent as I’d like.

However when you hear of debacles like this, it really does put you off. I want my money to go to a good cause. I don’t want my data being shared without my knowledge so that other charities can investigate how much I earn, whether I own my property and what social circles I move in, and then decide whether I’m worth targeting. Surely these charities should be thankful for every single donation. The widow’s mite springs to mind.

I feel for the poor animals and souls that rely on these charities, who are I’m sure going to take a hit from these fines. It’s not their fault, yet no doubt it’s them that’s going to pay the price.

At last agreement has been reached on the EU – US Privacy Shield agreement which now replaces the Safe Harbor agreement. Safe Harbor was ruled invalid in 2015 by the EU Court of Justice, because they said there were not sufficient safeguards for personal data under the voluntary scheme.

The new agreement is intended to protect the privacy of EU citizens when their personal information is processed in the US.

Companies will be able to sign up to the EU – US Privacy Shield from August 1st once they have implemented any necessary changes to comply with the strict compliance obligations.

The EU – US Privacy Shield is based on a system of self-certification by which US organisations commit to a set of privacy principles entitled the EU – US Privacy Shield Framework Principles.

The new framework was unveiled in February and has been under review since then. Back in June the European Data Protection Supervisor, Giovanni Buttarelli advised that it ‘needed significant improvements’ because it was not ‘robust enough’ and that the Commission should negotiate improvements to the Privacy Shield in three main areas:

limiting exemptions to its provisions;

improving its redress and oversight mechanisms,

integrating all the main EU data protection principles.

For the Privacy Shield to be an effective improvement on Safe Harbour it must provide adequate protection against indiscriminate surveillance as well as obligations on transparency, and data protection rights for people in the EU.

In Brussels on July 12th Věra Jourová, Commissioner for Justice, Consumers and Gender Equality said: “The EU – US Privacy Shield is a robust new system to protect the personal data of Europeans and ensure legal certainty for businesses. It brings stronger data protection standards that are better enforced, safeguards on government access, and easier redress for individuals in case of complaints”

In summary the EU-US Privacy Shield is based on the following principles:

Strong obligations on Companies handling data and robust enforcement

Clear safeguards and transparency obligations on US government access

Effective protection of individual rights

Annual joint review mechanism

Easier and cheaper redress possibilities in case of complaints —directly or with the help of the local Data Protection Authority

The Privacy Shield agreement applies to both data controllers and processors (agents), and specifies that processors must be contractually bound to act only on instructions from the EU controller and assist the latter in responding to individuals exercising their rights under the Principles.

Whilst the UK remains a member of the EU (which it will be for least the next 2 years) UK based companies that process data in the US will be able to use the Privacy Shield where appropriate.

Talks on ensuring a high level of data protection across the EU Marketers are now complete and draft text was agreed on Wednesday 16th December 2015. Marketers are delighted with the “strong compromise” agreed by Parliament and Council negotiators in their last round of talks.

The draft regulation aims to give individuals control over their private data, while also creating clarity and legal certainty for businesses to spur competition in the digital market. Back in September Angela Merkel appealed to the European parliament to take a business view rather than simply look at the Regulation from a data protection perspective lest the legislation hold back economic growth in Europe. At the same time she described data as the “raw material” of the future and expressed her belief that it is fundamental to the digital single market.

The regulation returns control over citizens’ personal data to citizens. Companies will not be allowed to divulge information that they have received for a particular purpose without the permission of the person concerned.

EU DPA Regulation – 7 Key Changes

4% Fines: The Council had called for fines of up to two percent of global turnover, while the Parliament’s version would have increased that to five percent. In apparent compromise, the figure has been set at four percent, which for global companies could amount to millions.

Data Protection Officers (DPOs): Companies will have to appoint a data protection officer if they process sensitive data on a large scale or collect information on many consumers. These do not have to be internal or full-time.

Consent: to marketers’ relief, consent will now have to be ‘unambiguous’ rather than the originally proposed ‘explicit’ which provides a more business-friendly approach to the legislation. In essence this means that direct mail and telephone marketing can still be conducted on an opt-out basis. Nonetheless, businesses will be obliged to ensure that consumers will have to give their consent by a clear and affirmative action to the use of their data for a specific purpose.

Definition of Personal Data – the definition has been expanded in particular by reference to an identification number, location data, online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that person.

Online identifiers -whether cookies and ISPs are personal data has been the subject of discussion for some months. James Milligan of the DMA has expressed the view that a compromise has been reached “Whether or not online identifiers such as cookies fall into the definition of ‘personal data’ will depend on where they are placed in the online ecosystem. For example, a cookie placed by my internet service provider will be classified as personal data as it could identify me, whereas a cookie placed by an advertiser lower down the online ecosystem and cannot be linked to my email address or anything else which could identify me, is unlikely to be considered as personal data. This represents a sensible compromise as it was feared that all online identifiers would be considered as personal data. This separation means non-identifiable, ‘blind’ data can be more widely used than identifiable personal data.”

Profiling – Profiling has now been included under the term ‘automated decision making’. Individuals have the right not to be subject to the results of automated decision making, so they can opt out of profiling. It will be necessary to implement tick-boxes or similar mechanisms to secure the data subject’s positive indication of consent to specific processing activities related to Profiling.

Parental consent – Member states could not agree to set a 13-year age limit for parental consent for children to use social media such as Facebook or Instagram. Instead, member states will now be free to set their own limits between 13 and 16 years.

Next Steps

The provisional agreements on the package will be put to a confirmation vote in the Civil Liberties Committee today (Thursday 17 December) at 9.30 in Strasbourg.

If the deal is approved in committee it will then be put to a vote by Parliament as whole in the new year, after which member states will have two years to transpose the provisions of the directive into their national laws. The regulation, which will apply directly in all member states, will also take effect after two years.

Written by Michelle Evans, Compliance Director at Data Compliant Ltd.

If you would like further advice on how the EU Regulation will affect your business, just call Michelle or Victoria on 01787 277742 or email dc@datacompliant.co.uk

What was Safe Harbour?

The Safe Harbour Framework was a cross border transfer mechanism which complied with EU data protection laws and allowed the transfer of personal data between the EU and the USA. More details on how Safe Harbour worked can be found here.

Why was the Safe Harbour Framework invalidated?

After the recent Facebook case ruling, on 6th October, the Court of Justice of the European Union (CJEU) judged that “US Companies do not afford an adequate level of protection of personal data” and therefore the Safe Harbour Framework is now invalid.

The CJEU indicated that US legislation authorises on a general basis, storage of all personal data of all the persons whose data is transferred from the EU to the U.S. without any differentiation, limitation or exception being made in light of the objectives pursued, and without providing an objective criterion for determining limits to the access and use of this data by public authorities.

The CJEU further observed that the Safe Harbour Framework does not provide sufficient legal remedies to allow individuals to access their personal data and to obtain rectification or erasure of such data. This compromises the fundamental right to effective judicial protection, according to the CJEU. You can read the European Court of Justice Press Release here.

There have been concerns about the Safe Harbour Framework for some time and the European Commission and the US authorities have been negotiating with a view to introducing an arrangement providing greater protection of privacy to replace the existing agreement.

How can I now transfer my data to US?

Organisations that have been using Safe Harbour will now have to review how they transfer personal data to the US and come up with alternative solutions. However, it is worth noting that the Information Commissioner’s Office has recognised that this process will take some time. And James Milligan at the DMA states that data already transferred to US-based companies under Safe Harbour will be unaffected.

In the meantime multi-national companies transferring data to their affiliates can look at using Binding Corporate Rules which allow the transfer of data from the EEA to be in compliance with the 8th data protection principle.

Another legal method of transferring personal data to the US is to use the Model Contract Clauses produced by the EU for transfers of personal information outside the EU.

Michelle Evans, Compliance Director at Data Compliant Ltd.

If you are planning to transfer data between the EU and the US, and would like help on how to do so in the light of this new ruling, just call Michelle or Victoria on 01787 277742 or email dc@datacompliant.co.uk